10 tech tips to cut down operating expenses for startups
Operating a startup or small business means spending money on critical expenditures like labor, critical supplies, and even software licenses. But in the earliest days of your business, you need to save as much money as you can so you have room to grow, and so you don’t have to take on unnecessary loans.
Luckily, you can cut down on operating expenses for your startup or small business with a few tech-savvy tips.
1. Get rid of excess paper
For starters, try to get rid of extra paper around the office. You don’t necessarily need tons of paper for your printer for sending out invoices, writing employee checks, and so on. These days, you can do many day-to-day business tasks with paperless tools and digital platforms.
Digital invoices, emails, Google Workspace, and other tools now replace papers throughout many industries. Lean into this development, and you’ll save money on office supplies across the board.
2. Shift to a cloud phone system
Next, you can and should shift to a cloud phone system or VoIP phone system. A cloud phone system means you don’t have to install and maintain extra hardware inside your office or workspace, saving you money in more ways than one.
This can save you up to 90% in terms of the initial cost of installing a phone system and another 40% to 90% on local or international calling costs.
3. Only use software you need
Take a long, hard look at the software you use throughout your office. Do an in-depth software audit and determine whether you really need all the software and tools you pay a subscription for. For example, if you pay a yearly subscription for a piece of software you use for marketing, but that tool’s job is already taken care of via another software platform, do you really need it?
In many cases, the answer is no. Therefore, you can cut software subscriptions for tools and platforms you don’t really need and use. Be sure to audit your current office software about once a quarter so you can regularly take stock of the tools you use and which ones you can get rid of to save a little extra money.
4. Utilize remote work
Remote work reached its pinnacle during the COVID-19 pandemic. But you can still leverage it to save money these days.
For example, you can implement partial remote work for your employees, meaning you don’t need as much office space as you would otherwise. This, in turn, allows you to pay less for an office building, for desks, and even for day-to-day office supplies.
Partial or full remote work can save you a lot of money in terms of employee space and practical supplies or necessities. Your employees may even work harder, resulting in higher cash flow.
Therefore, you should open up remote work to employees who might take advantage of such an opportunity. As a side bonus, many employees may feel better about working remotely and could become more loyal to your brand as a result.
5. Reduce credit card usage
Corporate credit cards are important financial tools. They allow you and your employees to buy important supplies or devices immediately without having to wait for cash flow to catch up to your business expenditure needs.
However, using your corporate credit card too much or using too many credit accounts results in high-interest payments and, over time, a serious strain on your business bank account. To that end, you should try to cut down on business credit card usage as much as possible.
Try to only use business credit cards when absolutely necessary, like when a critical machine for your business breaks down, and you have to purchase a new one ASAP. Similarly, only give certain employees leave to use a corporate credit card. That way, multiple employees don’t run around town spending frivolously without your supervision.
6. Streamline online marketing
Online marketing campaigns are crucial for bringing traffic to your site or increasing visitors to your retail store. But PPC ads, paid influencer deals, and other online marketing efforts can eat into your finances.
With this in mind, you should look at your online marketing campaigns and streamline them by:
- Analyzing which ads or campaigns perform the best
- Doubling down on those ads or campaigns
- Cutting the ads or campaigns that don’t perform well, as they essentially drain your finances for no reason
In other words, you should make sure you maintain only the digital marketing campaigns that produce the best returns on your investments.
7. Buy used furniture and vehicles
Need some extra furniture for your office, like a few new desks or chairs? Rather than spending tons of money on brand-new furniture, save your startup a bit of cash by purchasing used furniture. You can always upgrade after the fact, but in the meantime, buying used furniture will let you spend money where it’s really needed instead.
Use the same tip when buying workplace vehicles. Don’t splurge for a new car, which can cost $34,000 on average. Instead, buy a used car that gets the job done.
8. Outsource specialized tasks
From time to time, your business may require specialized tasks to accomplish a specific goal or satisfy a certain client. But purchasing the machinery to do that specialized task can be very expensive, and you’ll only need the task to be done once or twice.
To save a bit of money, you can outsource those specialized tasks to professionals or freelancers. While it may be a little more expensive in the short term, you’ll save money in the long term if the task in question isn’t one you think you’ll do regularly in the future.
9. Turn the lights off
Go green and save your startup some money by turning the lights off when you leave the office. By the same token, try to cut down on your electrical usage to save money on your utility bill every month. This is a small thing, but all that electricity can add up at the end of the month when you see your office building’s energy charges.
This is doubly true in the summer and winter, when offices tend to run the AC or heater more frequently. Coach your employees to turn off their computers or to turn off any electrical devices they don’t use. Make sure that electrical devices don’t stay on over the weekend, as well. Every little bit helps!
10. Practice accounting
Lastly, be sure to practice smart, tech-savvy accounting. Either hire an accountant or do the accounting yourself; in either case, you should track your expenditures, determine areas where you can save more money, and file your taxes properly. You can use accounting software and platforms to make sure you do the job right and to avoid making critical errors that could result in heavy tax fees each spring.
Ultimately, you can reduce your operating expenses as a startup or small business by practicing each of the above strategies and more. These tips will help you stretch your limited finances further when used in conjunction with each other, at least until your startup is ready to scale to greater success.